Aug 19 (Reuters) – Cantor Fitzgerald has launched prediction market trading for institutional investors, allowing clients to trade event contracts on regulated exchange Kalshi, the investment bank said on Wednesday.
The move expands Cantor’s institutional trading model, used for equities and fixed income, to prediction markets, which allow investors to trade contracts tied to the outcome of future events.Â
“Prediction markets are growing rapidly, but institutional participation has not kept pace because investors have lacked the ability to transact at scale on a regulated exchange. The liquidity is here,” said Pascal Bandelier, Cantor’s co-CEO and Global Head of Equities.
Prediction markets could balloon to $1 trillion in annual trading volumes by decade-end, Bernstein had said in April.
Cantor will act as an introducing broker and carry out institutional-size trades negotiation, while Susquehanna Predictions will provide pricing and liquidity for the trades.Â
In May, Reuters reported prediction market platforms including Kalshi are making a big push to attract top institutional investors and hedge funds.
Interest in prediction markets surged during the 2024 U.S. presidential election, boosting retail engagement and trading activity, with an increasing number of financial institutions now seeking to gain exposure to event-driven trades.
(Reporting by Prakhar Srivastava in Bengaluru; Editing by Jonathan Ananda)
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